At Gibson Young Solicitors, we pride ourselves on providing premier guidance and legal support to clients looking to access short-term finance options, encompassing bridging loans, development loans, and more. The modern-day financial landscape has seen a surge in bridging loans, favoured by landlords, developers, and homeowners to navigate funding challenges. 

A bridging loan, by definition, is a short-term financial solution, typically repaid within 6-24 months. Offered by agile lenders, these loans provide swift access to finance without the typical wait and paperwork that traditional lenders demand.

That said, bridging loans come with higher interest rates than standard mortgages or term loans. It's crucial for borrowers to have a clear strategy for the loan's repayment.

• Purchasing a property unsuitable for standard mortgages

• Making timely auction acquisitions

• Executing minor renovations and developments

• Consolidating or refinancing existing debts

Bridging loans are predominantly property-centric. Their primary function isn’t to address long-term financial needs, but to offer immediate financial relief.

Securing a bridging loan depends on several factors, including loan size, purpose, collateral, and a clearly defined exit strategy. Typically, loans are gauged based on Loan-to-Value (LTV), usually up to 75% of the property's value, and the repayment duration can range from a day to two years.

While bridging loans start from approximately £20,000, they can stretch into the millions for those requiring substantial short-term funding. Given their nature, bridging loans boast a swift approval process, and with the right legal support, accessing funds can be quicker than with traditional lenders.

Your chance of securing a bridging loan with bad credit largely depends on your repayment plan. While offering your property as collateral can boost your prospects, if you're planning to use a remortgage for repayment, some lenders might be cautious. Essentially, it is not the poor credit that is the concern, but how it impacts your repayment approach.

Closed bridging loans have a predetermined repayment date, while open bridging loans are more flexible, relying on the borrower's exit strategy.

Bridging loans come with their set of costs, including setup fees, valuation charges, exit and administrative fees as well as legal fees

Bridging loans are instantaneous financial solutions, whereas development finance caters to property construction and expansion needs. While the former grants a lump sum, the latter offers staggered payments based on project milestones. Deciding between the two is contingent on your specific requirements.

Development loans are tailored to fund expansive projects, ranging from major refurbishments to large-scale constructions. Catering to both novices and seasoned developers, these loans are usually disbursed in stages based on the progress of a project.

It is paramount to stick to your exit strategy when availing a bridging loan. Failing to do so can lead to increased interest rates, additional fees, and potential legal action. Moreover, it could harm your credit rating and your ability to secure future financing. Furthermore, since bridging loans are typically secured against a property, failure to exit could result in the lender taking possession of the asset.

For the conveyancing process linked with bridging loans, it is recommended to engage solicitors experienced in this area. They can enhance the likelihood of a successful loan, whether for personal or business needs. Seeking legal expertise can guarantee swift and effective handling of all related issues.

Gibson Young Solicitors offer both legal expertise and outstanding client service. We are friendly and approachable and our advice is clear and straightforward. 

If you would like to speak to an expert Bridging Loan lawyer, ring us on 020 7924 2919, email us at reception@gibsonyoungsolicitors.com or fill out our Contact Form. All initial enquiries are free of charge and without any obligation.